The Tourism and Economic Growth Enigma: Examining an Ambiguous Relationship through Multiple Prisms

Abstract

This paper revisits the ambiguous relationship between tourism and economic growth, providing a comprehensive study of destinations across the globe which takes into account the key dynamics that influence tourism and economic performance. We focus on 113 countries over the period 1995-2014, clustered, for the first time, around six criteria that reflect their economic, political and tourism dimensions. A Panel Vector Autoregressive model is employed which, in contrast to previous studies, allows the data to reveal any tourism-economy interdependencies across these clusters, without imposing a priori the direction of causality. Overall, the economic-driven tourism growth hypothesis seems to prevail in countries which are developing, non-democratic, highly bureaucratic and have low tourism specialization. Conversely, bidirectional relationships are established for economies which are stronger, democratic and with higher levels of government effectiveness. Thus, depending on the economic, political and tourism status of a destination, different policy implications apply.

The relationship between tourism and economic growth in the EU-28. Is there a tendency towards convergence?

“…Tourism contributes significantly to economic growth all over the world (Figini & Vici, 2010), has a strong impact on the environment (Hall, 2011), facilitates, when practiced responsibly, sustainable development, and has a remarkable contribution to progress, since there is an overlap between economically developed countries and those with developed tourism sector (C ardenas-Garc ıa et al, 2015;Kum et al, 2015;UNCTAD., 2013;UNWTO., 2017). Antonakakis et al (2019) note that the hypothesis of tourism as a growth factor is verified in the case of underdeveloped countries, very bureaucratic, with low tourism specialization.…”

“…The impact of tourism on economic growth has been examined by numerous authors: Alfaro Navarro et al (2020); Antonakakis et al (2019); Calero and Turner (2020); Cheng and Zhang (2020); Estol and Font (2016); Ivanov and Webster (2013); Neuts (2020); Nunkoo et al (2020); Roudi et al (2019); Santamaria and Filis (2019); Sokhanvar (2019); Tang and Tan (2016); Tang (2020); Vergori and Arima (2020) and others. Tourism contributes significantly to economic growth all over the world (Figini & Vici, 2010), has a strong impact on the environment (Hall, 2011), facilitates, when practiced responsibly, sustainable development, and has a remarkable contribution to progress, since there is an overlap between economically developed countries and those with developed tourism sector (C ardenas-Garc ıa et al, 2015;Kum et al, 2015;UNCTAD., 2013;UNWTO., 2017).…”

Coupling coordination between environment, economy and tourism: A case study of China

“…Many theories and models have been proposed, such as environmental Kuznets curve (EKC) [7][8][9], coordinated development theory [10], economic-energy-environmental impact model [11], decoupling theory [12][13][14] and coupling model [15]. With the rapid development of tourism, some scholars have begun to explore the relationship between tourism, the environment and the economy, such as the relationship between tourism and ecological environment [16][17][18][19][20][21][22][23], the relationship between economic development and tourism [24][25][26][27][28][29][30][31], and interactive relationship between the environment, economy and tourism [32][33][34][35][36]. For example, Pang et al found that the inbound tourism in eastern China has a significant impact on regional economic growth, and the growth of the inbound tourism in the eastern region is the Granger cause for the growth of its tertiary industry [25].…”

The Development of the Travel and Tourism Industry in the World

“…[Jelev, 2016] The economic climate along with the economic policies that are applied to the destination could directly or indirectly encourage the development of the tourism sector and thus increase tourism income. [Antonakakis & Dragouni, 2018] Tourism offers a combination of products and services which need to be customized based on the preferences of different market segments. [Mehran & Olya, 2018] Various big data have been applied to tourism research, making a great improvement.…”